Mentor Journey: Are you ready for 2022?
Updated: May 21, 2022
Last year, I shared my outlook for 2021 and how to prepare for it. With just a couple of weeks left in 2021, many entrepreneurs asked me about 2022 and what to expect. I don't have a magic mirror on the wall, but I would like to share some thoughts with you.
As a Fintech, what kind of exit strategy are you working on?
When I say Fintech, I mean "noncorporate" or "bank spawned" startups.
Fintech startups are getting a lot of attention in our market. Many support and awareness programs pop up everywhere, funding opportunities are advertised, and people proudly offer Fintech "diplomas" to add to your Linkedin account! Great efforts, and people should have a pat on the back for making Fintech startups the number one pivot on the mind of every founder.
But, there are some things that they missed sharing.
As a Fintech startup, you are nothing without the backing of a bank. Depending on your case, you need a massive pile of cash as a critical resource and the central bank's approval to operate.
As a founder of a Fintech startup, you need to think of yourself as the founder of a buyable startup. In other words, you must build with a near end in mind. The most straightforward approach is to make sure that banks are so intrigued by your customer acquisition of (especially of GEN-Z) that they seek to buy your startups to get their hands on all the data and the future purchasing power.
So work on your exit strategy, my friends. Things are accelerating to a place where only the strong (deep pockets+well connected) will survive. And yes, some startups have raised tons of money. Still, if you take a closer look at what they are doing, you can easily see a zombie scrambling to do anything to feel relevant again.
What other expectations do I have for 2022?
1. Declining customer purchasing power
2022 is expected to be an unpredictable year for customers' buying power, especially if you offer a value proposition for the mass market. The masses will be seeking the best quality possible for the lowest price possible. Thanks to the newly trending buy now pay later approach, they will be enticed to spend. Whether they will be able to fulfill the "pay later " part of the deal or not is another question for another time. But they are interested in the "buy now" component, and you should take advantage of that.
So if you are a startup seeking to reach as many customers as possible in that area, I would recommend that you focus on using the distribution channels with the heaviest traffic, like Amazon Egypt, and the BNPL payment service with the most renowned name and highest customer confidence, like VALU. All this will help you reduce your operations workload and increase your reach.
If you are a startup offering a value proposition to a niche market, my advice would be to focus on the experience around the product/service you are selling. This kind of customer cares about how the product/service is sold and what they buy. So focus on the customer interactions to strengthen the customer relationship with cement if you can. A niche customer lost is a customer you will struggle to regain.
2. Increasing costs of operations.
Increasing operations costs can throw away their profit margins and unit economics for startups. As you prepare for next year, reimagine how you can your operations survive! Consider alternative processes and raw materials to accomplish the same tasks.
Remember, cutting costs can only buy some time. It is only a temporary solution.
Get inspired by researching the world wide web for process innovation and operation optimization stories. Create a task force to stay on top of the subject and build future-proof capabilities for your startup operations and the market status. This approach, combined with quick iterations and implementations, will allow your startup to stay ahead and minimize losses. Find inspirations and adapt them to your startup.
If you don't know where to start, I recommend looking at this!
3. Competition getting more competitive
With all that in mind, it is only normal that competition will get fiercely competitive : )
Remember that your response should not be limited to price reduction. There are so many things to consider first before price cutting. Spend time learning your market, your customer, and your distribution channels.
Focus on delivering a relatable brand to your customer, find ways to dominate your distribution channels if you can, and don't pick unnecessary fights, especially with stronger competitors. Avoid it as much as you can.
4. Talents will move to corporate startups/corporate jobs.
2022 will mark the departure of many talents from traditional local startups to corporate startups and typical corporate jobs. Don't panic. Just make it harder for your team members to leave by faking a heart attack or treating them well. True talents respect a good employer and the space to make their talent evident.
Share with them a vision to inspire them with realistic targets and corresponding rewards for 2022. Meet with them and listen to every one of them as human beings, not as employees. Accordingly, give them workloads and responsibilities that can fit their thoughts, personas, talent, and leadership potential. Big companies will never be able to do that! 2022 is the year for human-focused management.
To prepare for 2022, you must figure out what kind of infrastructure you built since you started operations?
Be BRUTALLY HONEST with your answers.
Don't let entrepreneurial vanity and your bragging Facebook posts stop you from seeing the reality. 2022 will be a very challenging year that you will probably need to consider innovation to fight back. In a challenging business environment and considerable limited resources, one must not go for innovation for its sake. Founders must consider a systematic and focused approach to innovation. The best approach for your innovation strategy in 2022 is to create resources/infrastructure based on new value propositions. That is why I ask you to be BRUTALLY HONEST with your answer to what kind of infrastructure we have built.
Questions you can ask yourself:
What kind of network did you build? (Partners, Suppliers, Distributors, etc...)
What kind of resources do you own?
What kind of talents do you have on your team?
What kind of brand recognition did you reach?
What Do you do best? (Design, Manufacturing, Building, Distributing, etc...)
Then put it into the context of your market. For example, if you have your manufacturing facilities, compare production quality and quantity to other existing factories.
Once you know what you have, ask yourself, what can I do with it to answer an unfulfilled customer job ( or a new value proposition) in the market?
Remember: Customers (human beings) don't buy products or services. They use them as tools to get a sense of accomplishment or progress in their work, personal life, health, social status, etc...
I will be more than happy to help. Reach out here.
2022 is going to be an exciting and unpredictable year. Be prepared!
2022 is the year of natural selection!
Goodwill and Respect!